Almost $100,000 in fines and back-pay orders after back-packers in Cairns short-changed

24 June 2015

A Cairns businessman and his tour company have been penalised almost $100,000 in fines and back-pay orders after short-changing five backpackers and defiantly claiming they would “not get a cent” of it.

The Federal Circuit Court in Brisbane has handed down a $12,000 fine against businessman Leigh Alan Jorgensen and another $55,000 against his company, which trades as Trek North Tours.

In addition, the Court has ordered Jorgensen’s company to back-pay the five 417 working holiday visa-holders $29,956 in underpaid wages and entitlements.

The fines and back-payment order are the result of an investigation and legal action by the Fair Work Ombudsman.

Fair Work Ombudsman Natalie James says the Court’s decision sends another clear message both to Jorgensen and others that underpayment of overseas workers in Australia is serious conduct and will not be tolerated.

“We treat underpayment of visa holders particularly seriously because they can be vulnerable if they are not fully aware of their rights or are reluctant to complain,” Ms James said.

The five backpackers, aged between 23 and 32, were underpaid when they worked for Trek North Tours between August, 2013 and April last year.

They were in Australia on 417 working holiday visas from Hong Kong, the Netherlands, Italy and Taiwan.

They worked as tour desk agents at three Trek North Tours centres in Cairns – two on The Esplanade and one on Lake Street – for periods of up to four months.

After the employees lodged complaints with the Fair Work Ombudsman last year, inspectors found they had been paid flat rates of between $10 and $16.37 an hour.

In some cases, they were not paid anything at all for some work performed.

Under the General Retail Industry Award, they should have been paid at least $17.98 for normal hours and up to $39.56 an hour for shifts that attracted penalty rates.

Jorgensen also refused to return a $500 bond to one worker after she resigned.

The Fair Work Ombudsman attempted to resolve the matter without having to commence formal legal action by first issuing Jorgensen and his company with three Compliance Notices requiring him to back-pay the workers and a Notice to Produce documents.

Under the Fair Work Act, employers must comply with Notices issued by Fair Work inspectors unless they have a reasonable excuse or make a Court application to challenge the Notice.

Ms James says the Fair Work Ombudsman was left with no option but to commence legal action after Jorgensen refused to cooperate.

Jorgensen told Fair Work inspectors “you will not get a cent” and claimed his company had never employed three of the underpaid backpackers.

“We made extensive efforts to resolve the matter without going to court, but we were ultimately left with no option but to commence litigation to recover the money owing to these workers,” Ms James said.

“The Court’s decision in this matter shows that employers who refuse to promptly rectify underpayments of workers can face significant fines in addition to back-payment orders.

“Successful litigations such as this also benefit employers who are doing the right thing because it helps them compete on a level playing field.”

Ms James says the Fair Work Ombudsman places a high priority on protecting the workplace rights of overseas workers.

In August last year, the Fair Work Ombudsman commenced a national review of the wages and conditions of overseas workers in Australia on the 417 working holiday visa after receiving allegations that some unscrupulous operators were exploiting backpackers.

Members of the Fair Work Ombudsman’s Overseas Workers’ Team have travelled to various regional locations, including Cairns, to meet with key stakeholders to gain intelligence as part of the review.

Of all requests for assistance received by the Fair Work Ombudsman from visa-holders, 40 per cent are now coming from 417 visa-holders.

Employers and employees seeking assistance can visit www.fairwork.gov.au or contact the Fair Work Infoline on 13 13 94. Overseas workers can call 13 14 50 if they need interpreter services.

Information on the website to assist people from culturally and linguistically diverse backgrounds has been translated into 27 languages.

The website also contains fact sheets tailored to overseas workers and international students.

The Agency has produced videos in 14 languages and posted them on YouTube to assist overseas workers understand their workplace rights in Australia.

The Fair Work Ombudsman is committed to providing advice that you can rely on. The information contained on this website is general in nature. If you are unsure about how it applies to your situation you can call our Infoline on 13 13 94 or speak with a union, industry association or workplace relations professional. Visitors are warned that this site may inadvertently contain names or pictures of Aboriginal and Torres Strait Islander people who have recently died.